Sep 09, 2014

Farmers in Parana, Brazil Opt for More Soybean Production

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

In their first estimate of the new 2014/15 growing season, the Secretary of Agriculture in the state of Parana is forecasting a record large soybean acreage in the state and a record low full-season corn acreage. Soybeans compete with full-season corn and dry beans for spring acres and soybeans have turned out to be the clear winner. What is happening in Parana is being repeated all across Brazil - farmers are switching their full-season corn to soybeans and they are delaying planting more of their corn to the safrinha crop.

According to the Secretary of Agriculture, farmers in the state are expected to plant a record large soybean crop of just over 5 million hectares. If the weather cooperates during the growing season, farmers in the state are expected to harvest 17.1 million tons of soybeans or 18% more than last year when dry weather reduced the crop by 2 million tons.

Full-season corn production has been losing acreage in the state for several years and it is expected to go down another 14% this year to 572,600 hectares or the fewest hectares on record. The Secretary of Agriculture has not yet made an official estimate for the 2014/15 safrinha corn acreage in the state. Depending on the eventual safrinha corn acreage, approximately 10% to 20% of the corn in Parana will be full-season production and 80% to 90% will be safrinha production.

Soybeans continue to offer a better opportunity for Parana farmers than corn or dry beans for their first spring crop. Since 2010, the price of soybeans in the state has increased 68% going from R$ 35 per sack to over R$ 60 per sack. Up until August of this year, the monthly price of soybeans in Parana has averaged R$ 60.41 per sack or approximately US$ 12.48 per bushel. The cost of producing soybeans in the state is in the range of US$ 7.00 to 8.50 per bushel. Transporting soybeans to export facilities is relatively cheap since the Port of Paranagua is located in the state of Parana. Therefore, farmers in Parana can make a profit growing soybeans at lower prices than farmers in Mato Grosso.

Soybeans are also gaining acreage in Parana at the expense of dry bean production whose acreage is expected to decline 14% to 204,000 hectares. An over production of dry beans has driven down prices to below the cost of production and without an export market, farmers feel soybeans are a better option than dry beans.